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pain at the gas pump is seeping into consumer spending... in today's cover story....deconstructing the latest manufacturing data.... plus.... trump under exam-- a u.s. attorney gives "the donald" failing grades for his business school. and...worried about the stock market? one money manager recommends--a cup of coffee. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas good morning! it's tuesday, august 27th. i'm angela miles. in today's first look:market moving comments... stocks fell yesterday on ramped up rhetoric from secretary of state john kerry calling syria's actions inexcusable following a chemical attack.
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also-- treasury secretary jack lew says the u.s.government will hit the debt ceiling by mid october unless congress votes to increase the limit by the end of the session the dow fell below 15,000 --losing 65 points, the nasdaq was unchanged and s&p dropped 7. gold crossed the 1,400 dollar mark and oil is trading around 1-0-6. jc penney's acking stock.shares fell monday on word hedge fund manageer bill act-man is selling 39 million shares. he's the single largest share holder in jcp. tony harris of performance trust joins us today. tony, the market shrugged off that durable goods order number yesterday but today we're going to be looking forward to that gdp number. what do you see in the bond market? > >i think that the bond market has had a change in terms of it caught a bid early in the day on monday and it held the gains
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throughout the day. you had poor new home sales report back on friday and of course them poor durable goods report on monday. so i think that you're catching a little bit of demand which is a shift from what we've seen recently. >.what's happening with stocks relative to bonds and bonds relative to stocks? > >you saw a lot of talk about the great rotation back in may or june when the taper talk first began. you really did see some of the rotation in terms of the fund flows. you saw people move out of bonds and into equities. but what you've seen in recent weeks is significant outflows out of equities as well as bonds. it looks like the beneficiaries right now would be money market funds as well as commodities funds. > >and what about that taper talk. economists believe that some sort of taper situation will happen in september. the fed may be looking at december or even closer to next year. what's the bond market telling us?
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> >i think the market really been anticipating a september taper. but i think the last two days we've seen pretty poor economic data. i think people are starting to think it might be later or on the flipside you could also have a slight reduction in the amount of anticipated reductions the federal reserve was going to employ. > >tony thanks for your insight. > >thank you angie. in our cover story, the fiscal drag on the economy from cuts in government spending may extend longer than previously thought.that's the finding of economists after orders for durable goods---things meant to last at least three years, fell in july. across the u-s, there were fewer orders for aircraft parts, computers and electrical equipment. a downturn that may filter down to m-r-l industries, a suburban chicago maker of the boxes that hold computer components behind cockpit instruments. "it affects the pace. some of our clients will say push the delivery date back to december." economists say struggling overseas markets--which is half of m-r-l's customers and a drop in government spending are to blame. so next month, jim
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soderquist and a team from m-r- l industries will travel to singapore to drum up business. "i think well get our market share and be back in the growth business." for now, however, there's this dip. new orders of durable goods fell 7.3% in july. but in fairness, it followed a blistering june. there's also a backlog of orders not yet filled. and hope that orders from europe may pick up although not-quickly. still, its leading some manufacturers to reorganize the shop floor and improve efficiencies now--- in anticipation of better times--here, that includes a bid to bring a job from mexico back to the u-s-. "aren't your labor costs higher? yes, but we can make 10 when they make 2. and instead of
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four people on one machine, we have one person running two machines." still, the disappointing durable goods report could be a factor that holds off the fed's expected tapering of its bond- buying program that many analysts expect to begin by this fall. sales of big ticket appliances are slipping at sears. the wall street journal reports among top sellers appliances now accounts for only 29% of the retailer's value, down dramatically from 40% a decade ago. at lowe's -- appliance sales improved to 19% from 10% and home depot's jumped to 12% from 4. also, sears' private label kenmore has fallen from number 1 to 3 as whirpool and ge have moved ahead. the donald is on the defense. donald trump is reacting to a lawsuit brought on by new york's attorney general.
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the suit claims trump made false promises to students of his for profit institution trump university. and that trump pursuaded students to spend tens of thousand of dollars they couldn't afford, for lessons they never received. trump lashed back, stating that the institution received a 98% approval rating from students. dean harold krent of the kent school of law in chicago, says this could be a sticking point for the attorney general's case. "that certainly is an issue in this lawsuit. if all the evaluations after the seminar proved to be successful or least satisfied customers, that would undermine the issue that this was consumer fraud. not entirely but at least it would undermine it somewhat. after all the new york attorney general's office was flooded by complaints of consumers who said they weren't satisfied." krent says for-profit institutions have been a target in recent years. he says due to the bad press, fewer lenders are willing to give students money to attend the schools. goldman's sachs recent trading glitch could wind up costing the firm tens of millions of dollars. goldman put out waves
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of wrong orders to trading exchanges last tuesday. the wall street journal reports -- some of the trades have been cancelled, others corrected. yet-- there may be a price to pay for the mistake. reuters reports 4 senior tech specialists are now on administrative leave. at jp morgan chase-- a top litigation lawyer is said to be leaving the bank in the wake of a slew of lawsuits and investigations against the firm. about 13-hundred american airlines employees have been permanently banned from trading the funds available to them in the company's 401-k plan. another 800 have received warning letters. according to an investigation done by reuters, at issue is the practice of collective trading by a group. this can force fund managers into buying and selling securities at inopportune times. an investment advisor told the chicago tribune it was akin to "taking a chain saw to an ingrown toenail." in other news about american airlines- -- the carrier's profits doubled in july -- to $292 million. 2 trading exchanges are merging
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to take on the new york stock exchange. bats global markets and direct edge are combing to become the second largest trading exchange in the u.s. behind the new york stock exchange. bats- and direct edge -- hope to have a competitive edge with high speed trading.even though trading volumes are falling. traders are keeping an eye on biotech stocks. it follows the merger of pharma giants amgen and onyx. amgen will pay 10.4 billion dollars for onyx, as the company now gains more access to cancer fighting drugs.the deal is expected to close at the beginning of the fourth quarter. onyx currently has three cancer treatment drugs, and one in the works. both stocks gained traction on the news, with amgen closing up 8 dollars and onyx closing up 6. u.s. corporations are pouring money into signapore. according to reports-- u.s.busineses invested $138 billion during the past ten years. singapore now leads other asian nations with outside investment money coming in. we asked tim mulholland of china america capital what makes singapore so appealing to investors. "what's attractive about singapore is they have a very solid financial infrastructure. extrememly sophisticated. they have a very sophisticated
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workforce and most importantly, there's a real rule of law there with protection or property and i think that's a very important thing." singapore also was also first among asian countries to sign the 2003 free trade agreement with the u.s. china's economy is in focus this week. chinese officials are assuring skeptics that its economy is stabilizing after growth slowed for 10 straight quarters. the government says there are new signs of momentum, and china should hit its growth target for the year. chinese officials are assuring skeptics that its economy is stabilizing after growth slowed for 10 straight quarters. the government says there are new signs of momentum, and china should hit its growth target for the year. in greece -- the country is set to qualify for more bailout money. a member of the european central bank notes athens is on track for more aid if it keeps with current measures to cut down on its debt. walmart is suffering a set back. the world's largest retailer has been intent on expanding into india. however, the financial times says the plan is on hold for now. the indian goverment reportedly is investigating
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whether walmart violated rules including bribing indian officials to get permits to open stores. boeing unveils its latest dreamliner model. the 787-9-- is 20 feet longer than the original dreamliner and will be able to carry 40 more passengers.the 787-9 is the second version of the newly- designed and lighter aircraft. boeing expects to make its first delivery to air new zealand in mid-2014. general motors is changing its superbowl game plan. the automaker says --- this year-- it will advertise during the big game. the company wants to build buzz for several new models. gm made the call last year to opt out of advertising during the super bowl claiming the rate of $3.8 million dollars per 30 seconds wasn't worth the money. mcdonalds has a mighty plan to boost sales. the company will roll out its so called "mighty wings" nationwide throughout september. it will also beef up its menu with a new wrap and pumpkin latte and subway has a new flavor focus...the chain will add garlic bread as an option for its sandwiches, starting the beginning of september.
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a federal judge has approved the deal that drops a discrimination suit against celebrity chef paula deen.this latest development comes two weeks after a judge dismissed race discrimination claims brought in a suit against deen by a former employee. the chef has seen her reputation take a major hit after she admitted in a deposition for the case that she used a racial slur. we lost a legend over the weekend. muriel siebert-- passed away saturday from complications of cancer. sibert-- made her mark in the financial industry by becoming the first woman to buy a seat on the new york stock exchange. she went on to make millions and donate much of her money to help other women in the financial industry. seibert was 84. still to come: if gas prices are down, why are consumers hitting the brakes on spending. plus has tesla reached a turning point in the marketplace. and after the break...a start up survival guide. first business continues after this.
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tesla is racing ahead of the competition in california. drivers there are buying more tesla cars than other luxury brands.such as porsche, jaguar, volvo, land rover and lincoln. it also sold more than fiat, buick and mitsubishi. things aren't so bad for the stock, either. yesterday shares gained nearly 2 dollars, closing at 164 dollars.
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tesla is proving itself as a star start up. but 44 percent of all new companies failing after the third year.jackie keenan reports from florida on the growing need for business incubators that promote growth. dr. cindy sanberg's company is about to go big time. her product, nutrasystem, which gives a boost to stem cells, may soon be found on grocery- store shelves everywhere. "right now we are in the final review with kroger for possible placement of our product there, so we are very excited." sanberg owes her success to the university of south florida's tampa bay technology incubator. incubators arm entrepreneurs with the resources needed for success. with a focus on life sciences, this incubator helps scientific entrepreneurs develop companies focusing on things like cancer-detection treatments and medical devices. "it's not just a location, it's more than just a building -
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it's the network, it's the people, it's the support, it helps them stay on track." nurturing and consulting entrepreneurs are the main goals of a business incubator, but giving them access to investors is equally vital. this was the case for sanberg, but getting in touch with her inner business woman, was also critical. "we're a bunch of neuroscientists that got together, what they primarily helped with us the most are marketing ideas, some of the slides, business plans, executive summaries and organization of that to better our package." cities like tampa, fla, that were hit hard by the recession,are embracing incubators as a way to fuel job growth. and with most incubators focusing on technology, those jobs are professional and high-paying. here at the tampa bay technology incubator, more than 40 companies have created more than 300 jobs with salaries averaging
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65,000-dollars. as these statistics get known, then areas learn the value of supporting entrepreneurs and the growth of businesses because they see the value of having that in their community. according to the national association of business incubators, the number of incubators have blossomed to more than 1,250 across the country. the association says a start-up success rate is 87 percent after going through the rigorous process. reporting from tampa, florida, i'm jackie keenan, first business news. while many focus on technology, incubators can specialize in everything from the arts to manufacturing. a new test to be taken by some college students will assess them as they leave school. it's in response to employers who've become skeptical of college credentials, inflated grade point averages. and some who flat-out say a high g-p-a is not a barometer for success in the workplace. it's called the collegiate learning assessment, or c-l-a, and will be offered to seniors next spring at about 200 colleges. the exam is being developed by a nonprofit that
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started in the rand corporation. why consumers are holding back on spending even as gas prices drip down. and later on.why one trader says he's watching the coffee crowd for market clues. thats coming up!
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consumers are showing signs of exhaustion on back to school spending. and gas prices could be the culprit. jeff lenard-- representing the national association of convenience stores is skyping with us this morning. thanks for coming on the show. > >thank you for having me. > >riddle me this...gas prices are falling for now. the national average for unleaded is $3.54 down 9 cents from a month ago and 20 cents from a year ago. so what's going on with the consumer. why are they feeling the pinch? > >consumers react to price increases not decreases not
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what the price itself is. so what we're seeing is a big increase in pessimism related to the previous runup in prices that we saw that happened in late july. people when we surveyed them in early august they still had that in their minds and hopefully with the recent price decreases people will feel better. because when you get into the fall i think all retailers are looking for happy customers and more in the way of sales. > >it's amazing though, you do see so much hinging on gas prices so how do they cut back for instance? > >well i think what they do is, different customers do different things. some may buy gas so frequently--instead they may get $10 of gas a couple times a week---never really filling up. it's not really what i think anybody wants. sometimes they may cut back on trips too where you'll see they combine trips. they may come to ths store and they may get their drink there instead of going down the street. that's good for our industry but we also don't
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want pessimistic customers because you don't want to be blamed for the gas prices even though it's not your fault. > >did consumers have anything positive to say? > >i think we were really impressed by how honest people are on a monthly basis. they really understand the issue and when you hear that 88 percent of consumers find that gas prices really affect their view of the economy. that's pretty huge because when you see those prices---when you drive to work in the morning. when you drive home at night and you get that drumbeat of prices you can see what it does to consumers and why they're so frustrated in the recent runup. > >thanks again for your thoughts. we'll have you back next month and see what happens. > >i hope they're very happy next month. just ahead--as the going gets tough in the stock market. the tough get going buying stocks.find out about one hot stock. next in chart talk. ♪
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and there's a big advantage parents can give their kids -- making sure they get active at least 60 minutes each day. studies show that physical activity not only helps kids stay healthy, it can enhance important skills, like concentration and problem solving, which can improve academic performance. this means physical activity can help your kids in the most important game of all -- life.
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matt shapiro president of mws capital joins us now for some chart talk. hello matt, i might imagine people started to freak out with the dow below 15,000, but not those that watch our show. they know all about the long term trends. what do see in the market that you like right now? > >what i like are those classic american bands. i know everyone's saying...well matt that's what always like. with
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dow where it is, its backed off a little bit but so many people the big question is what stocks do you buy because so many have done so well. do you go for the googles? do you go for the value? do you go for the stock that's down. do you go for the emerging market? and what i'm saying is just focus on those companies that really do it right and one stock i think is a good template is starbucks which i think has become one of our largest holdings over the years. > >starbucks is trading around $700, so it's relatively high but you say that it still could be a good time to buy. > >well it is high and it has a pe of about 26 which historically about average for it. but what i'm saying is in this market stock picking is going to be very crucial so stick to companies that you really like and you really want to own. there's no question about the integrity and the
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profits and the business momentum of starbucks. one thing that i'm noticing is in that slower 3pm time slot i've noticed a lot of kids going in and getting those frappucinos so here's another extension. this store is very busy at all levels. > >it's very hip and cool the young crowd. > >they're you go with those frappucinos, then when they're 18,19,20 they start getting on coffee. > >and the addiction begins. thank you matt. that's all we have for today.join us tomorrow for the details on a new plan to get every small business in america to hire one worker. will it add it up to "real" job growth. we'll find out. thank you for watching today. from all us at first business. we wish you a tremendous tuesday.
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♪ >> now a paid presentation for meaningful beauty advanced by cindy crawford. >> with special appearances by debra messing. >> valerie bertinelli. >> christa miller. >> and stars from tv's royal pains and the mentalist. >> hosted by network tv correspondent katrina szish. >> brought to you by guthy-renker. >> hi, everyone, i'm beauty and style journalist katrina szish on location in beverly hills. in just a few minutes we'll meet one of the most beautiful women in the world, supermodel cindy crawford.

First Business
KICU August 27, 2013 4:00am-4:31am PDT

News/Business. Angie Miles. (2013) New. (CC) (Stereo)

TOPIC FREQUENCY U.s. 5, Onyx 4, Tesla 4, Singapore 4, Cindy Crawford 2, Starbucks 2, Amgen 2, Reuters 2, Katrina Szish 2, Sears 2, Goldman 2, Florida 2, Chicago 2, New York 2, Jackie Keenan 2, China 2, Boeing Unveils 1, Boeing 1, Muriel Siebert 1, Paula Deen 1
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